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Technology Stocks : RGFX Raster Graphics

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To: William Douglas who wrote (302)9/26/1997 9:20:00 PM
From: Fred Fahmy   of 593
 
Bill,

Re: 3x or 4x

I am assuming the P/E will expand to something closer to their growth rate and closer to what ENCD's P/E was when it was in a similar stage in it's growth. Both of these numbers are/were around 40. ENCD carried a P/E in the 40's for a long time. If I assume next year's earnings to be around .65 that gives me a price around 26. Obviously some things have to happen for the P/E to expand to 40. First, they must deliver on the earnings and second WS has to discover this stock. I don't think the idea of RGFX behaving in a similar fashion to the ENCD of a couple years ago is that far fetched. It may take a while but I wanted to get my bets in early while the entry cost is relatively low. If it starts to climb over the next many months, I will add to my position which is only about 1/3 to 1/2 as many shares as I would like to accumulate if I see an ENCD type phenomena develope here.

Good luck to all,

FF
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